What Happens When Countries Can’t Develop?

While every country’s path towards development has its own nuances and unique components, there are some common features among countries that have developed over the past several hundred years. Quite simply, most countries start their development by manufacturing low-end goods and subcomponents that are shipped to more developed countries, which integrate them into finished products. The United States followed this path by producing spun cotton in the South and industrial goods in the North during its development in the 18th and 19th centuries. China followed this path in recent years by manufacturing a number of low-end goods that support a variety of markets.

Countries then build upon this foundation of low-end manufacturing to move up the value chain. After low-end subcomponents, countries gradually start to manufacture higher-end parts and finished goods, which facilitates domestic consumption and a virtuous cycle that leads to a higher value-added economy.

This is an extremely common development path and is how the majority of today’s first world economies were able to develop. There are some exceptions for countries that have been able to leverage their natural resources, such as oil, to skip the low-end manufacturing phase and emerge directly as higher value-added economies, but these exceptions are rare.

If the 3D printing industry continues to mature, it is possible that it will no longer be economically efficient to outsource manufacturing of low-end goods and subcomponents. Those items will be fabricated in 3D printing factories near their end customers. This will result in cheaper finished good and more jobs for developed economies, but it could potentially be disastrous for developing economies.

Rogue States

It is unclear what will happen if developing economies are not able to progress via this traditional method. They may find other routes towards development to circumvent the lack of opportunity in the low-end manufacturing space. Another possible outcome is that these economies simply won’t develop, remaining outside and likely disenfranchised by the global economic system. This is unfortunate on the human level, but also presents a general security concern as it creates an incentive, potentially an imperative, for those countries to disrupt the system that has left them behind.

This can manifest itself in a number of ways, many of which are not catastrophic. However, to focus on low-probability, high-downside risks for a moment, we seem to be moving towards a world where the cost of building globally disruptive tools and weapons is decreasing. Nuclear programs have historically been difficult to build, and chemical and biological weapons have not been widely distributable in an effective enough fashion to pose a broad threat. With the exception of North Korea, non-state actors and poorly resourced states have not effectively built or deployed these tools.

Advances in genomics, biotechnology, and cyberweaponry have the potential to make potentially catastrophic effects achievable by non-state actors and poorly resourced states. This is a general concern across the board. However, it is significantly notable in context of an entire category of countries that could find themselves utterly left behind in upcoming years as a result of shifting dynamics in the global manufacturing space. Some of these countries may find themselves with both the strategic imperative to disrupt or reshape the system into one in which they can participate and the tools to act upon this imperative.

Bret Boyd is the CEO of Knoema, a software platform for data access and discovery. Bret also cofounded the Grayline Group, an analytics and advisory firm that helps organizations prepare for emerging technological and socioeconomic change. Previously, Bret built and led the enterprise business unit at Stratfor, where he advised a variety of multinational corporations and investment groups on strategy and international growth issues. Bret has also served in executive roles in the technology and strategy consulting industries. Bret began his career as an infantry officer in the United States Army and served in the U.S. Special Operations Command. He is a graduate of West Point and the coauthor of Catalyst: Leadership and Strategy in a Changing World. Read Bret's full bio.